Tribunal directs deletion of derivative loss disallowance, citing lack of evidence. Appeal allowed. The tribunal directed the Assessing Officer to delete the disallowance of the currency derivative loss, citing lack of additional evidence before the ...
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Tribunal directs deletion of derivative loss disallowance, citing lack of evidence. Appeal allowed.
The tribunal directed the Assessing Officer to delete the disallowance of the currency derivative loss, citing lack of additional evidence before the CIT-A. The decision was based on available material and relevant case laws. The appeal was allowed, and the order was pronounced on 26/02/2020.
Issues: Assessment of currency derivative loss as bogus unexplained cash credits based on search statement.
Analysis: The appeal was against the assessment year 2012-13, challenging the treatment of currency derivative loss as unexplained cash credits. The department argued that the loss lacked genuineness and creditworthiness based on evidence from search proceedings. The tribunal reviewed the detailed paper book submitted by the assessee, including contract notes, bank statements, and judicial precedents. Referring to a previous decision, the tribunal found that the issue of bogus currency derivative loss was not new. The tribunal highlighted a similar case where the addition was deleted due to lack of evidence supporting the AO's view.
The tribunal noted that the AO had issued notices and received details from the MCX Stock Exchange but failed to verify the transactions' genuineness with the broker. The CIT-A found that the assessee provided all necessary documents supporting the transactions. The AO's addition was solely based on a retracted statement made during a search operation. The CIT-A concluded that there was no corroborative evidence to deem the transaction unexplained. The tribunal upheld the CIT-A's decision to delete the addition based on existing evidence before the AO.
In conclusion, the tribunal directed the Assessing Officer to delete the disallowance of the currency derivative loss, citing the lack of additional evidence presented before the CIT-A. The decision was based on the available material and the applicability of relevant case laws. The appeal was allowed, and the order was pronounced on 26/02/2020.
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